State governments borrow about N46.17bn from three banks to pay salaries between January and June 2023 from Access Bank, Fidelity Bank, and Zenith Bank Group.
The States borrowed the most from Access Bank in six months, with a record of N42.97bn loan.
It was followed by Zenith Bank (N1.78bn borrowed) and Fidelity Bank (N1.42bn borrowed) within the six-month period.
According to the First Half of the 2023 financial statement of Access Bank, the outstanding balance on the salary bailout fund was N58.84bn by June 30, 2023, from N101.81bn in December 2022.
“The amount of N58,842,651,795 represents the outstanding balance on the state salary bailout facilities granted to the bank by the Central Bank of Nigeria for onward disbursements to state governments for payments of salary of workers of the states.
“The facility has a tenor of 20 years with a 2 per cent interest payable to the CBN. The bank is under obligation to on-lend to the states at an all-in interest rate of nine per cent per annum. From this creditor, the bank has nil undrawn balance as at 30 June 2023,” Access Bank noted.
For Fidelity Bank, the H1 2023 financial statement showed that the outstanding balance on the salary bailout fund was N80.65bn by June 30, 2023, from N82.07bn in December 2022.
The bank noted “FGN Intervention fund is CBN Bailout Fund of N80.65billion (31 Dec 2022: N82.07bn). This represents funds for states in the Federation that are having challenges in meeting up with their domestic obligation including payment of salaries. The loan was routed through the bank for on-lending to the states. The bailout fund is for a tenor of 20 years at 9 per cent per annum.”